Alright so, Cyclone and I have created a new piece of history.

As of now, the reason the Gnomes fled their original island homeland in the south-west is because my naga went and invaded it two centuries ago.

[hider=The Mostian Wars]
[b]-The First Ceresian Invasion of Mostia[/b]
Date: 275-273 years ago
Belligerents: Sacred Empire vs Mostian Freehold
Casus Belli: Holy War
Victor: Sacred Empire (Annexation of 2/3's of the island)

Summary: 275 years ago during the second wave of the Sacred Empire's colonial invasions the island nation of Mostia, homeland of the gnomish race was in a state of political instability following a series of natural disasters. Despite an immense technological advantage, the gnomes were caught entirely unprepared for the endless hordes that emerged without warning from the sea. The Sacred Empire invaded the divided nation during its period of weakness and quickly conquered two thirds of the nation before a ceasefire was made following the gnomes' heroic defence of Mindoral, the underground citadel-city. 

Despite its quick and relatively easy conquest of most the island, the Sacred Empire agreed to peace due to the combination of said defeat at Mindoral as well as the difficulty in controlling the land they had conquered due to the damage done by the various disasters that took place.

[b]-The Second Ceresian Invasion of Mostia[/b]
Date: 252-246 years ago
Belligerents: Sacred Empire vs Mostian Freehold
Casus Belli: Holy War
Victor: Sacred Empire (Full annexation of entire island, mass Gnome exodus)

Summary: After a period of peace, the Mostian Freehold knew that its time was up, seeing as the Sacred Empire had repaired most of the damage done by the disasters and could now move supplies through properly to siege their great citadel. The Sacred Empire set up a naval blockade around the remaining Mostian Freehold and cut them off from foreign food supplies. The Mostian Gnomes knew they would not be able to hold forever so took the chance to break the blockade, which they did. This begun a mass wave of refugee's fleeing to the continent and further showed the Ceresians the need to modernize. 

The Sacred Empire despite numerous setbacks still won, primarily because they eventually flooded Mindoral using tunnels they had drilled through from the sea, tunnels that they had secretly started making during the peace period after the first invasion.
[/hider]

As such, here is the new map of the world with the gnomish homeland part of the Ceresian Empire. Currently speaking the Gnomish population is aiming for a free gnomish state (a la Israel).

[img]http://i.imgur.com/sB0uWsa.png[/img]